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IAG, which also owns Iberia, Aer Lingus and Vueling, reported first-quarter operating losses before exceptional items of 535 million euros ($580 million), compared with a profit of 135 million a year ago. Revenue dropped 13% to 4.6 billion euros.
IAG warned it expects results to get worse in a statement also setting out plans for a sweeping restructuring at BA.
Pre-tax profits were hit by an exceptional charge of 1.3 billion euros due to overhedging of its fuel and foreign currency needs for the rest of 2020, it said.
Echoing comments from rivals such as Lufthansa (DE:LHAG) , the airline said it will take several years for passenger demand to return to 2019 levels.
Operating losses in the second quarter will be significantly worse than in the first three months of the year given the decline in passenger capacity and traffic despite some relief from government job retention and wage support schemes, it said. It didn’t give 2020 profit guidance.
BA has 45,000 employees, including 16,500 cabin crew and 3,900 pilots, according to its website.
“British Airways is formally notifying its trade unions about a proposed restructuring and redundancy programme,” the statement added.
“The proposals remain subject to consultation but it is likely that they will affect most of British Airways’ employees and may result in the redundancy of up to 12,000 of them.”
The measures come after IAG boss, Willie Walsh, a dealmaker who made his name standing up to unions and cutting costs, last month put off plans to retire to deal with the industry’s worst crisis.
Highlighting the speed of the damage as governments imposed lockdowns to contain the pandemic, IAG said all the decline in operating profit in the first quarter came in March.
